l\.

epublic of tbe llbilippines

~upreme (!Court
TJjaguio QCitp

FIRST DIVISION

LOURDES VALDERAMA, G.R. No. 223660

Petitioner,
Present:

*SERENO, C.J.,
Chairperson,
**LEONARDO-DE CASTRO,
- versus - DEL CASTILLO,
JARDELEZA, and
TIJAM,JJ.

SONIA ARGUELLES AND LORNA Promulgated:

ARGUELLES,
Respondents
APR 0 '~ 2018 ~

x-------------------------------------:--------------------------------~-----x
DECISION

TIJAM, J.:

Before this Court is a petition for review' under Rule 45 of the Rules
of Court filed by Lourdes Valderama (petitioner) assailing the Decision2
dated December 14, 2015 and Resolution3 dated February 24, 2016 of the
Court of Appeals (CA) in CA-G.R. CV No. 103744. In the said Decision,
the CA dismissed the petitioner's appeal of the Resolutions4 dated April 11,
2014 and July 31, 2014 of the Regional Trial Court (RTC) in Case No. P-09-
499 LRC REC. No. 2400 ordering the cancellation of the Notice of Adverse

· On leave.
·• Designated as Acting Chairperson pursuant to Special Order No. 2540 dated February 28, 2018.
1
Rollo, pp. 3-33.
2
Penned by Associate Justice Magdangal M. De Leon, concurred in by Associate Justices Elihu
A. Ybanez and Victoria Isabel A. Paredes; id. at 35-46.
3
Id. at 48-49.
4
Penned by Judge Jose Lorenzo R. Dela Rosa; id. at 200-20 I and 214.
Decision 2 G.R. No. 223660

Claim made as Entry No. 8957Nol. 132/T-266311, Registry of Deeds of

Manila.

The Antecedents

On December 11, 2009, Sonia Arguelles and Loma Arguelles

(respondents) filed a petition to cancel adverse claim5 involving a parcel of
land covered by Transfer Certificate of Title (TCT) No. 266311. 6 The
petition was docketed as Case No. P-09-499, LRC Record No. 2400 before
the RTC, Branch 4, Manila.

In their petition, respondents alleged that on November 18, 2004,

Conchita Amongo Francia (Conchita), who was the registered owner of a
parcel of land consisting of one thousand (1000) square meters located in
Sampaloc, Manila and covered by TCT No. 180198 (subject property),
freely and voluntarily executed an absolute deed of sale of the subject
property in favor of respondents. The subject property was subsequently
registered in the names of respondents under TCT No. 26631 1. 7

On November 14, 2007, Conchita filed an affidavit of adverse claim 8

which was registered and annotated on TCT No. 266311. On January 24,
2008, Conchita died. As registered owners of the subject property,
respondents prayed for the cancellation of the adverse claim in the petition
subject of this controversy. 9

On February 10, 2010, petitioner and Tarcila Lopez (Tarcila), as fulJ-

blooded sisters of Conchita, filed an opposition 10 to the petition. They
claimed that upon Conchita's death, the latter's claims and rights against the
subject property were transmitted to her heirs by operation of law. 11 They
also argued that the sale of the subject property to the respondents was
simulated as evidenced by the following, among others: (1) Conchita had
continuous physical and legal possession over the subject property; (2)
Conchita was the one paying for the real estate taxes for the subject
property; and (3) Conchita had in her possession, up to the time of her death,
the Owner's Duplicate Copy of the TCT No. 266311. 12

Meanwhile, on September 24, 2013, while the petition to cancel

adverse claim was pending before the RTC, respondents filed a complaint 13
5
Id. at 53-56.
0
Id. at 58-60.
7
Id. at 53-54.
8
Id. at 63-66.
9
Id.
0
' Id. at 80-96.
" Id. at 81-82.
12
Id. at 84-85.
" Id. at 121 - 132 .
Decision 3 G.R. No. 223660

for recovery of ownership and physical possession of a piece of realty and its
improvements with damages and with prayer for the issuance of temporary
restraining order and/or writ of preliminary injunction against petitioner and
Tarcila, among others. The complaint was docketed as Civil Case No.
13130761 and raffled to the RTC, Branch 47, Manila.

In light of the respondent's fili ng of the complaint, petitioner and

Tarcila filed a notice of /is p endens 14 with respect to the TCT No. 266311 on
October 22, 201 3.

On November 21, 2013, respondents filed a manifestation and

motion 15 praying for the outright cancellation of the adverse claim annotated
on the TCT No. 26631 1 on the ground that petitioner's subsequent fili ng of
notice of /is pendens rendered the issue moot and academic.

After an exchange of several pleadings between the parties, the RTC

issued a Resolution 16 on April 11, 2014 ordering the cancellation of the
adverse claim. Jn arriving at the said ruling, the RTC reasoned, thus:

From the examination of pleadings between the parties re lative to

Civil Case No. 13130761 , ownership and physical possession are
sufficiently made as issues between the parties in the said case. The parties
have effectively submitted themselves to the jurisdiction and disposition
of the court relative to claims of ownership and possession over the
property covered by Transfer Certificate of Title No. 266311 of the
Registry of Deeds for the City of Manila.

While this court is aware of the case of Spouses Sajonas vs.

Court of Appeals, Et Al., G.R. No. 102377 (July 5, 1996), it cannot
disregard the pronouncement of the court in Villaflor vs. Juerzan,
G.R. No. 35205 (April 17, 1990) which states that a Notice of Lis
Pendens between the parties concerning Notice of Adverse Claim calls
for the cancellation ther eof. Hence, to r econcile with the two cases, this
court order s the cancellation of the Adverse Claim in view of the
Notice of Lis Pendens annotated on TCT No. 266311. Considering,
however, the case between the parties pending before Branch 47, the
cancellation brought about by the Notice of Lis Pendens is in no way in
determination as to the veracity and substance of the adverse claim. The
cance llation does not touch upon the issues of ownership and possession
which is the property left to the jurisdiction disposition of Branch 4 7 of the
Regional Trial Court of Manila. If this court will continue with
determining the substance of the questioned adverse claim then there is a
possibility that two adverse decisions will result. Thus, this court leaves
the issues of ownership on possession of the wisdom of Branch 47 of the
Manila Regional Trial Court.

14
Id. at 166-168 .
•s Id. at 115-117.
6
' Id. at 200-20 I .
Decision 4 G.R. No. 223660

WHEREFORE, premises considered, the Notice of Adverse Claim

made as Entry No . 8957Nol. 132{[-266311, Registry of Deeds of Manila
is ordered CANCELLED. However, the cancellation is not a determination
of the veracity and substance of the adverse claim and is not a final
determination on the issue of ownership and possession. 17 (Emphasis
supplied)

Petitioner and Tarcila filed a motion for reconsideration 18 but the same
was denied in a Resolution 19 dated July 31 , 2014. Aggrieved, petitioner and
Tarcila appealed to the CA raising the lone assignment of error:

THE COURT A QUO COMMLTTED A GRAVE AND REVERSIBLE

ERROR TN ORDERING THE CANCELLATION OF THE ADVERSE
CLAIM CAUSED TO BE ANNOTATED BY THE LATE CON CHITA
FRANCIA SIMPLY BECAUSE A NOTICE OF LIS PENDENS WAS
SUBSEQUENTLY CAUSED TO BE ANNOTATED BY OPPOSITORS-
APPELLANTS ON TRANSFER CERTIFICATE OF TITLE NO. 266311 10

Ruling of the CA

On December 14, 2015, the CA rendered a decision21 dismissing

petitioner's appeal for lack of merit. The CA held that the issue on
cancellation of adverse claim is a question of law since its resolution would
not involve an examination of the evidence but only an application of the
law on a particular set of facts. Having raised a sole question of law, the
petition was dismissed by the CA pursuant to Section 2, Rule 50 of the
Rules of Court. 22 Nonetheless, the CA found no error in RTC's cancellation
of the adverse claim, to wit:

In any case, oppositors-appellants' appeal before this Court has no

merit. Oppositors-appellants insist that the RTC erred in ordering the
cancellation of the notice of adverse claim annotated al the back of TCT
No. 2663 11 , appearing as Entry No. 8957 Nol. 132.

We do not agree.

In Villaflor vs. Juezan, the Supreme Court pronoun(c)ed:

"The principal issue in this appeal is whether or not an

adverse claim annotated in a transfer certificate of title may be
cancelled when the va lidity or invalidity of the claim is sti ll
subject of inquiry in a civi I case pending resolution by the trial
court.

xx xx
i1 Id.
iR Id. at 202-212.
1
q Id. at 214.
20
Id. at 22 1.
21
Id. at 35-46.
22
Id. a t 4 1-43.
Decision 5 G.R. No. 223660

On February 22, 1961 the appellant registered his

affidavit of adverse claim in Transfer Certificate of Title No. T-
1217 (formerly a part of Original Ce1tificate of Title 806) under
primary entry No. 26083 of the Register of Deeds of Davao. The
affidavit conformed to the requirements of Section I I 0, Act 496.

On March 1, 1961 , the herein appellant filed Civil Case

3496 seeking from the defendant therein the surrender of owner's
duplicate of Transfer Certificate of Title T-1217 in order that the
deed of sale in favor of the herein appellant will be registered or
annotated in the certificate of title.

In Civil Case No. 3496 the defendant's answer raised the

issue of validity of the deed of sale in favor of the herein
appellant. In fact, trial was had on this issue and the case until
the present is pending decision in view of the death of Judge
Abbas.

More than four (4) years after the appellant's adverse

claim was annotated that is, on October 15, 1965 and while case
No. 3496 is (sic) pending, the herein appellee presented fo r
registration two (2) deeds of sale affecting the land subject of the
action, the first dated March 21, 1963 conveying 8.6186 hectares
and the second dated September 6, 1986 conveying the
remaining 3.0219 hectares and as a consequence, Transfer
Ce1tiftcate of Title T-1217 was cancelled and in lieu thereof
Transfer Certificate of Title T-7601 was issued to the appellee
wherein the adverse claim annotated was carried on.

It is this adverse claim which the appellee seeks to be

cancelled in this case.

xx xx

On August 21 , 1968, petitioner-appellee filed a motion

to dismiss appeal in the Court of Appeals on the ground that the
issue involved has become moot and academic, because
oppositor-appellant Jose Juezan filed a notice of /is pendens on
the property covered by T .C .T. No. T-760 I and in connection
with Civil Case No. 3496.

The basis of Civil Case No. 3496 is a deed of absolute

sale dated July 7, 1956, allegedly executed by Simon Maghanay
in favor of appellant Jose Juezan. This document is also the basis
of the Affidavit of Adverse C laim ordered cancelled by the trial
court. The purpose of sa id adverse claim is to protect the interest
of the appellant pending this litigation.

Thus, considering that a notice of /is pendens had been

annotated on T.C.T. No. T-7601 of petitioner-appellee, the Court
finds no basis for maintaining the adverse c la im .

This Court secs no reason for disturbing the questioned

order of the trial court dated August 25, 1967 directing the
cancellation of the oppositor-appellant's adverse claim at the
back of transfer certificate of title No. T-760 I. The notice of /is
Decision 6 G.R. No. 223660

pendens filed by the oppositor-appellant affecting the same

property in connection with Civil Case No. 3496 is sufficient.

Moreover, in the manifestation that was filed by counsel

for appel Iant on February 8, 1990, it appears that the related case
pending in the Court of Appeals docketed as CA-G.R. No.
43818-R was terminated thus affirming the decision of the trial
court, and entry of judgment has been made per letter of
transmittal dated November 5., 1975.

Consequently, the unstant case has been rendered moot

and academic."

WHEREFORE, the appeal is DISMISSED.

SO ORDERED.D

Petitioner and Tarcila moved for reconsideration24 of the CA decision

but the same was denied in a Resolution25 dated February 24, 2016.

Undaunted, petitioner alone brought the instant petition raising the

following issues:

1. Whether the appeal filed before the CA involved a pure

question of law;

2. Whether the ruling of the Honorable Court in Villaflor

vs. Juezan is inapplicable to this case; and

3. Whether the adverse claim caused to be annotated by a

person on a title may be cancelled merely because
another person caused the annotation of a notice of lis
pendens on the same title. 26

Simply stated, the core issue to be resolved in this case is whether the
subsequent annotation of a notice of lis pendens on a certificate of title
renders the case for cancellation of adverse claim on the same title moot and
academic.

Ruling of the Court

The CA did not err in dismissing the

appeal for raising a pure question of
law

23
Id. At 43-45 (citations omitted).
24
Id. at 264-275.
25
Id. at 48-49.
26
Id. at 15.
Decision 7 G.R. No. 223660

Petitioner questions the CAfs finding that no question of fact was

raised before it. She argues that questions of fact were involved in her
appeal, such as whether or not the facts of the case are similar to the facts in
Villaflor vs. Juezan 27 so as to justify its application. Petitioner also
mentioned that in the respondents' brief filed with the CA, the respondents
called the attention of the CA to examine the peculiar facts surrounding the
instant case and Civil Case No. 13130761. Respondents also questioned the
legitimate interest of the petitioner over the subject property. Thus,
petitioner posits that the CA should have resolved the appeal taking into
consideration the evidence on record because the matters raised require the
re-evaluation of the existence or relevance of surrounding circumstances.28

We are not persuaded.

Under Section 2, Rule 41 of the Rules of Court, there are three modes
of appeal from decisions of the RTC, viz:
Section 2. Modes ofappeal. -

(a) Ordinary appeal. - The appeal to the Court of Appeals in

cases decided by the Regional Trial Court in the exercise of its original
jurisdiction shall be taken by filing a notice of appeal with the court which
rendered the judgment or final order appealed from and serving a copy
thereof upon the adverse party. No record on appeal shall be required
except in special proceedings and other cases of multiple or separate
appeals where law on these Rules so require. In such cases, the record on
appeal shall be filed and served in like manner.

(b) Petition for review. - The appeal to the Court of Appeals in

cases decided by the Regional Trial Court in the exercise of its appellate
jurisdiction shall be by petition for review in accordance with Rule 42.

(c) Appeal by certiorari. - In all cases where only questions of

law are raised or involved, the appeal shall be to the Supreme Court
by petition for review on certiorari in accordance with the Rule 45.
(Emphasis Ours)

Moreover, Section 2, Rule 50 of the Rules provide that an appeal to

the CA raising only questions of law shall be dismissed outright, thus:

Section 2. Dismissal of improper appeal to the Court of Appeals.

- An appeal under Rule 41 taken from the Regional Trial Court to the
Court of Appeals raising only questions of law shall be dismissed, issues
purely of law not being reviewable by said court. Similarly, an appeal by
notice of appeal instead of by petition for review from the appellate
judgment of a Regional Trial Court shall be dismissed.

27
263 Phil. 224 ( 1990).
28
Rollo, pp. I 5-17.
Decision 8 G.R. No. 223660

An appeal erroneously taken to the Court of Appeals shall not

be transferred to the appropriate court but shall be dismissed
outright. (Emphasis Ours)

Applying the foregoing rules, there is no question that an appeal from

the RTC to the CA raising only questions of law is an improper appeal which
shall be dismissed outright. Thus, We now delve into the issue on whether
petitioner's appeal before the CA raised purely questions of law thereby
warranting its outright dismissal.

A question of law arises when there is doubt as to what the law is on a

certain state of facts, while there is a question of fact when the doubt arises as
to the truth or falsity of the alleged facts. For a question to be one of law, its
resolution must not involve an examination of the probative value of the
evidence presented by the litigants, but must rely solely on what the law
provides on the given set of facts. If the facts are disputed or if the issues
require an examination of the evidence, the question posed is one of fact. The
test, therefore, is not the appellation given to a question by the party raising it,
but whether the appellate court can resolve the issue without examining or
evaluating the evidence, in which case, it is a question of law; otherwise, it is
a question of fact. 29

As correctly observed by the CA, a careful perusal of the records

reveals that the essential facts of the case are not disputed by the parties
before the CA. Contrary to the petitioner's claim, the question of whether this
Court's ruling in the case of Villaflor is applicable to the present case is not a
question of fact. Given an undisputed set of facts, an appellate court may
resolve the issue on what law or ruling is applicable without examining the
probative value of the evidence before it.

Moreover, no other than the petitioner raised the issue on the

cancellation of the adverse claim as the sole issue in her appeal before the
CA. As such, the CA correctly concluded that the said issue involved a pure
question of law as its resolution would not involve an examination of the
evidence but only an application of the law on a particular set of facts. At
any rate, the determination of whether an appeal involves only questions of
law or both questions of law and fact is best left to the appellate court. Al I
doubts as to the correctness of the conclusions of the appellate court wi ll be
resolved in favor of the CA unless it commits an error or commits a grave
abuse of discretion. 30

The CA, therefore, did not err in dismissing the appeal filed by the
petitioner for being an improper appeal. The proper mode of appeal is an
appeal by certiorari before this Court in accordance with Rule 45. Section 2
29
l eoncio. et al. v. Vera, et al., 569 Phi I. 5 12 (2008).
'° First Bancorp. Inc. v. CA. 525 Phil. 309. 326 (2006).
Decision 9 G.R. No. 223660

of the said Rule provides that appellant has a period of 15 days from notice of
judgment or final order appealed from within which to perfect her appeal. In
this case, petitioner filed the present petition before Us well beyond the said
reglementary period.

Failure to perfect an appeal within the period provided by law renders

the appealed judgment or order finaE and immutable. However, this rule is not
without exceptions. In some cases, this Court opted to relax the rules and take
cognizance of a petition for review on certiorari after an improper appeal to
the CA "in the interest of justice and in order to write finis to [the]
controversy"31 and "considering the important questions involved in a (the]
case."32 As such, We proceed to decide the merits of the case considering the
confusion brought by conflicting jurisprudence on the issue posed before Us.

Villaflor v. J uezan is not applicable

in this case

At the outset, We rule that Villaflor v. Juezan is not applicable in this

case. As aptly noted by the RTC, there is a need to reconcile the cases of
Villaflor v. Juezan and Sajonas v. CA 33 . Hence, it is an opportune time for
this Court to revisit the cases We decided delving on the issue before Us.

An adverse claim and a notice of lis

pendens under P.D. 1529 are not of
the same nature and do not serve the
same purpose

An adverse claim and a notice of !is pendens are both involuntary

dealings expressly recognized under Presidential Decree No. 1529 (P.D.
1529), otherwise known as the Property Registration Decree.

The remedy of annotation of an adverse claim was introduced under

Act 496 or the Land Registration Act, Section 110, which reads:

Sec. 110. Whoever claims any right or interest in registered land

adverse to the registered owner, arising subsequent to the date of the
original registration, may, if no other provision is made in this Act for
registering the same, make a statement in writing setting forth fully his
alleged right or interest, and how or under whom acquired, and a reference
to the volume and page of the certificate of title of the registered owner,
and a description of the land in which the right or interest is claimed.

The statement shall be signed and sworn to, and shall state the
adverse claimant's residence, and designate a place at which all notices

31
Municipality of Pateros v. Hon. CA , et al., 607 Phil. 104, 11 4 (2009).
32
City oflapu-lapu v. Philippine Economic Zone Authority, 748 Phil. 473, 508(2014).
33
327 Phil. 689 ( 1996).
Decision 10 G.R. No. 223660

may be served upon him. The statement shall be entitled to registration as

an adverse claim, and the court, upon a petition of any party in inter est,
shall grant a speedy hearing upon the question of the validity of such
adver se claim and shall enter su ch decree therein as j ustice and equity
may r equire. If the claim is adjudged to be inval id, the registration shall
be canceled. If in any case the court after notice and hearing shall find that
a claim thus registered was frivolous or vexatious, it may tax the adverse
claimant double or treble costs in its discretion. (Emphasis Ours)

Thereafter, P .D. 1529 introduced minor changes in the wordings of

the law, as follows:

Sec. 70 Adverse Claim- Whoever claims any part or interest in

registered land adverse to the registered owner, arising subsequent to the
date of the original registration, may, if no other provision is made in this
Decree for registering the same, make a statement in writing setting forth
fully his alleged right or interest, and how or under whom acquired, a
reference to the number of certificate of title of the registered owner, the
name of the registered owner, and a description of the land in which the
right or interest is claimed.

The statement shall be signed and sworn to, and shall state the
adverse claimants residence, and a place at which all notices may be
served upon him. This statement shall be entitled to registration as an
adverse claim on the certificate of title. The adverse claim shall be
effective for a period of thirty days from the date of registration. After the
lapse of said period, the annotation of adverse claim may be canceled
upon filing of a ver ified petition therefor by the party in inter est:
Provided, however , that after cancellation, no second adver se claim
based on the sam e gr ound shall be registered by the same claimant.

Before the lapse of thirty days aforesaid, any party in interest may
fi le a petition in the Court of First Instance where the land is situated for
the cancellation of the adverse claim, and the court shall grant a speedy
hearing upon the question of the validity of such adverse claim, and
shall r ender judgment as may be just and equitable. If the adverse
claim is adjudged to be invalid, the r egistration ther eof shall be
ordered canceled . If, in any case, the court, after notice and hearing shall
find that the adverse claim thus registered was frivolous, it may fine the
claimant in an amount not less than one thousand pesos nor more than five
thousand pesos, in its discretion. Before the lapse of thirty days, the
claimant may withdraw his adverse claim by filing with the Register of
Deeds a sworn petition to that effect. (Emphasis Ours)

In the case of Flor Martinez v. Ernesto G. Garcia and Edilberto M

34
Brua, the Court held that:

The annotation of an adverse claim is a measure designed to

protect the interest of a person over a piece of real property, where the
registration of such interest or right is not otherwise provided for by the
Land Registration Act or Act No. 496 (now P.D. No.1529 or the Property
14
625 Phil. 377 (20 I 0).
Decision 11 G.R. No. 223660

Registration Decree), and serves a warning to third parties dealing with

said property that someone is claiming an interest on the same or a better
right than that of the registered owner thereof. 35

Also, in the case of Teresita Rosal Arrazola v. Pedro A. Bernas and

Soledad Bernas Alivio, 36 the Court explained:

The purpose of annotating the adverse claim on the title of the

disputed land is to apprise third persons that there is a controversy over the
ownership of the land and to preserve and protect the right of the adverse
claimant during the pendency of the controversy. It is a notice to third
persons that any transaction regarding the disputed land is subject to the
outcome of the dispute. 37

As provided under the third paragraph of Section 70 of P.D. 1529:

The validity or efficaciousness of an adverse claim may only be

determined by the Court upon petition by an interested party, in which
event, the Court shall order the immediate hearing thereof and make the
proper adjudication as justice and equity may warrant. And, it is only
when such claim is found unmeritorious that the registration of the adverse
claim may be cancelled.38

On the other hand, the following Sections of P.O. 1529 govern the
rule on annotation as well as cancellation of a notice of lis pendens:

Section 76. Notice of /is pendens. No action to recover possession

of real estate, or to quiet title thereto, or to remove clouds upon the title
thereof, or for partition, or other proceedings of any kind in court directly
affecting the title to land or the use or occupation thereof or the buildings
thereon, and no judgment, and no proceeding to vacate or reverse any
judgment, shall have any effect upon registered land as against persons
other than the parties thereto, unless a memorandum or notice stating the
institution of such action or proceeding and the court wherein the same is
pending, as well as the date of the institution thereof, together with a
reference to the number of the certificate of title, and an adequate
description of the land affected and the registered owner thereof, shall
have been filed and registered.

Section 77. Cancellation of lis pendens. Before final judgment, a

notice of lis pendens may be canceled upon order of the court, after
proper showing that the notice is for the purpose of molesting the adverse
party, or that it is not necessary to protect the rights of the party who
caused it to be registered. It may also be canceled by the Register of
Deeds upon verified petition of the party who caused the registration
thereof.

3
~ Id. at 391-392.
36
175 Phil. 452 ( 1978).
37 Id. at 456-457.
18
Ally. Ferrer v. Spouses Diaz. et al.. 633 Phi l. 244. 259 (20 I0).
Decision 12 G.R. No. 223660

At any time after fina l judgment in favor of the defendant, or other

disposition of the action such as to terminate finally all rights of the
plaintiff in and to the land and/or buildings involved, in any case in which
a memorandum or notice of !is pendens has been registered as provided in
the preceding section, the notice of !is pendens shall be deemed canceled
upon the registration of a certificate of the clerk of court in which the
action or proceeding was pending stating the manner of disposal thereof.
(Emphasis Ours)

Jurisprudence further provides in the case of Fernando Carrascoso,

Jr. v. The Hon. Court ofAppeals 39 that:

The doctrine of Lis pendens is founded upon reason of publ ic

policy and necessity, the purpose of which is to keep the subject matter of
the litigation within the power of the court until the judgment or decree
shall have been entered; otherwise by successive alienations pending the
litigation, its judgment or decree shall be rendered abortive and impossible
of execution.40

As distinguished from an adverse claim, the notice of /is pendens is

ordinarily recorded without the intervention of the court where the action is
pending.4 1

Moreover, a notice of Lis pendens neither affects the merits of a case

nor creates a right or a lien. The notice is but an extrajudicial incident in an
action. It is intended merely to constructively advise, or warn, all people
who deal with the property that they so deal with it at their own risk, and
whatever rights they may acquire in the property in any voluntary
transaction are subject to the results of the action. 42 Corollarily, unlike the
rule in adverse claims, the cancellation of a notice /is pendens is also a mere
incident in the action, and may be ordered by the Court having jurisdiction
of it at any given time. Its continuance or removal is not contingent on the
existence of a final judgment in the action, and ordinarily has no effect on
the merits thereof. 43

Given the foregoing, the law and jurisprudence provide clear

distinctions between an annotation of an adverse claim, on one hand, and an
annotation of a notice of lis pendens on the other. In sum, the main
differences between the two are as follows: (1 ) an adverse claim protects the
right of a claimant during the pendency of a controversy while a notice of
/is pendens protects the right of the claimant during the pendency of the
action or litigation; and (2) an adverse claim may only be cancelled upon
filing of a petition before the court which shall conduct a hearing on its

9
.i 514 Phil. 48 (2005). /
40

41
Id. at 79. ~
Villanueva v. Court of Appeals, 346 Phil. 289, 298 ( 1997).
42
Magdalena Homeowners Association, Inc. v. Court of Appeals, 263 Phil. 23 5, 241 ( 1990).
4
> Id.
Decision 13 G.R. No. 223660

validity whi le a notice of lis pendens may be cancelled without a court

hearing.

A subsequent annotation of a notice

of Lis pendens on a certificate of title
does not necessarily render a petition
for cancellation of adverse claim on
the same title moot and academic

Having laid down the differences between an annotation of an adverse

claim and of a notice of Lis pendens on a certificate title, We now delve into
the issue of whether both annotations on the same certificate of title
automatically constitute a superfluity that would warrant an outright
cancellation of adverse claim in a petition for its cancellation on the ground of
being moot and academic.

At the crux of the present controversy is this Court's ruling in the case
of Villaflor-1-1. In the said case, the appellant registered and annotated his
affidavit of adverse claim on a certificate of title on the basis of a deed of
sale issued in his favor pursuant to Section 110, Act 496. Subsequently, he
filed a civil case seeking the surrender of defendant's owner's duplicate of
the certificate of title in order that the deed of sale in his favor will be
registered or annotated in the same certificate. In the civil case, defendant
raised the issue of validity of the deed of sale in favor of appellant. More
than four years after and while the civil case was pending, the appellee
sought to cancel the annotation of the adverse claim. The lower court first
ordered its cancellation, then reconsidered, and finally returned to its
original stand. Thus, the sole issue on whether or not an adverse claim
annotated in a transfer certificate of title may be cancelled when the validity
or invalidity of the claim is still subject of inquiry in a civil case pending
resolution by the trial court, reached this Court. 45

In finding no basis for maintaining the adverse claim, this Court noted
the manifestation filed by the appellant's counsel that the related case
pending in the CA was terminated thus affirming the decision of the trial
court, and entry of judgment has been made. Consequently, this Court ruled
in Villaflor that the case has been rendered moot and academic. 46

Admittedly, the present case involves the same issue resolved by this
Court in Villaflor. However, the Villaflor ruling stemmed from a different
factual milieu. As pointed out by the petitioner, in the case at bar, the
respondents are the ones who filed the case subject of the notice of lis
pendens. Further, the ruling in Villaflor specifically highlighted the fact that
44
Villaflor, supra note 27.
45 Id.
46 Id.
Decision 14 G.R. No. 223660

the related civil case was already terminated and attained finality. Here, the
civil case filed by the respondents is still pending before the RTC.

To Our mind, the termination of the related case subject of the notice
of lis pendens was a material factor in considering the petition for
cancellation of adverse claim moot and academic in the case of Villaflor. As
such, the ru ling in Villaflor is still good law if the same factual
circumstances are attendant. Unfortunately, the facts in the present case calls
for a different ruling.

The ruling of this Court in the case

of Ty Sin Tei v. Dy Piao is applicable
in this case

In the case of Paz Ty Sin Tei v. Jose Lee Dy Piao 47 , this Court sitting
En Banc discussed in-depth the present issue. Although the said case was
decided in 1958, the rules on adverse claim were substantially the same
under Act 496 and under P.O. 1529, notwithstanding a few changes in the
wordings.

In Ty Sin Tei, the only issue presented before thi s Court is whether the
institution of an action and the corresponding annotation of a notice of !is
pendens at the back of a certificate of title invalidates a prior notation of an
adverse claim appearing on the same title, where the aforementioned action
and the adverse claim refer to the same right or interest sought to be
recovered. Unli ke in Villaflor, this Court, in Ty Sin Tei, set aside the lower
court's order directing the cancellation of appellant's adverse claim on the
certificate of title. Pertinent portions of the decision are instructive, and
reproduced as follows:

x x x the action taken by the lower Court in ordering the

cancellation of the adverse cla im before its validity could be passed
upon, is not sanctioned by law.

But We have to give certain consideration to the implication

created by the lower court's ruling that the institution of a court action for
the purpose of securing or preserving the right which is also the object of
an adverse claim invalidates the latter, irrespective of whether a notice of
Lis pendens has been annotated or not, for such a doctrine gives the
impression that the 2 remedies are contradictory or repugnant to one
another, the existence of one automatically nullifying the other. We are
inclined to believe otherwise, for while both registrations have their own
characteristics and requi sites, it cannot be denied that they are both
intended to protect the interest of a claimant by posing as notices and
caution to those dealing with the property that same is subject to a claim.
But while a notice of !is pendens remains during the pendency of the
action, although same may be cancelled under certain circumstances as
47
I 03 Phil. 858 ( 1958).
Decision 15 G.R. No. 223660

where the case is prolonged unnecessarily or for failure of the plaintiff to

introduce evidence bearing out the allegations of the complaint
(Victoriano vs. Rovira, 55 Phil., 1000; Municipal Council of Parafiaque
vs. Court of First Instance of Rizal, 40 Off. Gaz., 8th Supp., 196); and it
has even been held that a court, in the absence of a statute, has the inherent
power to cancel a Lis pendens notice in a proper case (Victoriano vs.
Rovira, supra), the same is not true in a registered adverse claim, for it
may be cancelled only in one instance, i.e., after the claim is adjudged
invalid or unmeritorious by the Court, acting either as a land registration
court or one of general jurisdiction while passing upon a case before it
where the subject of the litigation is the same interest or right which is
being secured by the adverse claim. The possibility therefore, that parties
claiming an interest in a registered property desire, for any other purpose,
to have their cause ventilated in a court of general jurisdiction, may result
in giving them two ways of making the registration of their claimed rights.
In such instances, it would not only be unreasonable but also
oppressive to hold that the subsequent institution of an ordinary civil
action would work to divest the adverse claim of its validity, for as We
have pointed out, a notice of Lis pent/ens may be cancelled even before
the action is finally terminated for causes which may not be
attributable to the claimant. And it would similarly be beyond reason to
confine a claimant to the remedy afforded by section 110 of Act 496 if
there are other recourses in law which such claimant may avail of. But, if
any of the registrations should be considered unnecessary or
superfluous, it would be the notice of /is pent/ens and not the
annotation of the adverse claim which is more permanent and cannot
be cancelled without adequate hearing and proper disposition of the
claim.

Wherefore, and on the strength of the foregoing considerations, the

order appealed from directing the Register of Deeds of Manila to
cancel the annotation of adverse claim at the back of Transfer
Certificate of Title No. 58652, is hereby set aside and appellee's
petition for cancellation dismissed, with costs against petitioner-
appellee. It is so ordered. 48 (Emphasis Ours)

The aforecited rationale of this Court in Ty Sin Tei is more in

accordance with the basic tenets of fair play and justice. As previously
discussed, a notice of !is pendens is a mere incident of an action which does
not create any right nor lien. It may be cancelled without a court hearing. In
contrast, an adverse claim constitutes a lien on a property. As such, the
cancellation of an adverse claim is still necessary to render it ineffective,
otherwise, the inscription will remain annotated and shall continue as a lien
upon the property. 49

Given the different attributes and characteristics of an adverse claim

vis-a-vis a notice of !is pendens, this Court is led to no other conclusion but
that the said two remedies may be availed of at the same time. In fact, in a

48
Id. at 868-869.
4
Q Sajonas vs. CA, 327 Phi I. 689. 7 I 0 ( I 996).
Decision 16 G.R. No. 223660

later case50 , this Court ruled that the annotation of a notice of lis pendens at
the back of a certificate of title does not preclude the subsequent registration
on the same certificate of title of an adverse claim. Citing the ruling in Ty
Sin Tei, this Court reasoned that the two remedies are not contradictory to
one another.

It bears stressing that the court is given a mandate under Section 70 of

P.D. 1529, i.e., upon a petition of any party in interest, it shall grant a speedy
hearing upon the question of the validity of such adverse claim and shall
enter such decree therein as justice and equity may require. Clearly, the
validity of the adverse claim in this case was not inquired into by the RTC.
The RTC, thus, reasoned that if it will continue to determine the substance
of the questioned adverse claim, it may arrive into a decision which is
adverse to the possible decision in the related case filed by the respondents.
However, We are not swayed by such reasoning. The law is clear as to the
mandate of the court hearing the petition for cancellation of adverse claim.
Unless the subject controversy of the adverse claim is finally settled by
another court in a related case, the court before which the petition for
cancellation of adverse claim is fi led cannot excuse itself from hearing the
validity of the said adverse claim.

Further, uphold ing the right of an opposing party to the outright

cancellation of adverse claim on the sole basis of a subsequent notice of /is
pendens on the same title would not achieve any sound purpose. It may even
encourage a party to not avail the remedy of annotation of a notice of /is
pendens if an adverse claim was already registered and annotated in the
same party's favor. Furthermore, such ruling would result to a situation
where the subject case of the notice of lis pendens may be dismissed on
grounds not attributable to the adverse claimant, an example of which is, as
pointed out by the petitioner, deliberate forum-shopping of the other party
who filed the related case. Thus, the adverse claimant will be left with no
other remedy in law to protect his or her rights. To Our mind, this is not the
intent of the law.

In light of the foregoing, this Court finds merit in the present petition.
The RTC erred in ordering the cancellation of the petitioner's adverse claim
on the mere basis of a subsequent annotation of a notice of !is pendens on
the same certificate of title. We reverse and set aside the Resolutions of the
RTC and order the petition for cancellation of adverse claim dismissed.

WHEREFORE, premi ses considered, the petition is GRANTED.

The Resolutions dated April 11 , 2014 and July 31, 2014 of the Regional
Trial Court (RTC) in Case No. P-09-499 LRC REC. No. 2400, ordering the
cancellation of the Notice of Adverse Claim made as Entry No. 8957/Vol. /

"' A. Dor nniln Resources De v., Inc. v. Court r~/Appeals. ~4 I Phil. 2 8 ( 1988). \l\
 Decision 17 G.R. No. 223660

132/T-266311, Registry of Deeds of Manila are hereby SET ASIDE and

respondents Sonia Arguelles and Lorna Arguelles's petition for cancellation
DISMISSED.

SO ORDERED.

,/
NOEL GI \~TIJAM
Asso iate Justice

WE CONCUR:

(On leave)
MARIA LOURDES P. A. SERENO
Chief Justice
Chairperson

T~J~01s'E~RO ~~
MARIANO C. DEL CASfiLLO
Acting Chairperson, First Division Associate Justice

Associate Justice

ATTESTATION

T attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court's Division.

~~~~
TERESITA J. LEONARDO-DE CASTRO
Associate Justice
Acting Chairperson, First Division
Decision 18 G.R. No. 223660

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Acting
Division Chairperson's Attestation, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court's Division.

ANTONIO T. CARPIO
Acting Chief Justice